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McCormick Tops Second-Quarter Views, Maintains Full-Year Outlook

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McCormick Tops Second-Quarter Views, Maintains Full-Year Outlook

McCormick (MKC) reported fiscal second-quarter results above Wall Street's estimates on Thursday, while the spices and seasonings producer reiterated its full-year outlook.

The company posted adjusted earnings of $0.80 a share for the quarter ended May, up from last year's $0.69, which was the consensus on FactSet. Sales climbed 17% to $1.94 billion, driven by a contribution from McCormick de Mexico, ahead of the Street's view for $1.91 billion.

On an organic basis, sales rose 1.7%, as a 2.2% gain in prices helped offset a 0.5% decline in volume and mix. The stock increased 5.2% in Thursday trade.

"Total organic growth was driven by accelerated momentum in flavor solutions, with gains across flavors and branded foodservice customers," Chief Executive Brendan Foley said in a statement. "We also effectively managed elevated inflation and incremental costs related to the Middle East conflict through productivity initiatives and cost savings programs, resulting in underlying margin improvement for the quarter."

Sales in the consumer segment climbed 23% annually to $1.14 billion in the second quarter, while flavor solutions rose 8.9% to $794 million.

In January, McCormick completed the purchase of an additional 25% stake in McCormick de Mexico, increasing its overall ownership in the company to 75%. McCormick said at the time that it expected the transaction to be accretive to net sales and adjusted earnings per share.

For fiscal 2026, McCormick continues to project adjusted EPS of $3.05 to $3.13 on a sales growth range of 13% to 17%. The Street is looking for non-GAAP EPS of $3.09 and sales of $7.89 billion.

"Looking ahead to the rest of the year, we expect to sustain the momentum in flavor solutions and increase reinvestment to improve consumer volume trends and organic sales," Foley said. "Our fundamentals remain strong, supported by our advantaged categories and disciplined execution, giving us confidence in our ability to deliver on our 2026 outlook."

Earlier this year, McCormick agreed to combine with Unilever's (UL) food business.

Foley said the company is moving forward with integration planning for the proposed deal. The combined company is expected to realize about $600 million in annual cost synergies, with another $100 million in cost and revenue synergies to be reinvested in growth.

Price: $50.09, Change: $+2.49, Percent Change: +5.22%

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